Insurance

07/11/2012 - G20 Finance Ministers have welcomed a designed to help governments develop financial strategies for disaster risk management.

OECD Secretary-General Angel Gurría, speaking in Mexico City, said that “considering the increasing frequency and scale of disasters and their potentially important spill-over effects, disaster risk management is a very relevant area for international cooperation, including at the G20 level. Based on country examples and best practices, the framework offers a series of concrete steps to develop risk assessment as a key step for promoting risk financing strategies. It is voluntary, flexible, and non-prescriptive ().”

All-hazards risk assessment helps countries to better understand the interconnections between disaster risks and their underlying physical and societal drivers. Financial strategies are needed to ensure that individuals, businesses and governments have the resources necessary for prompt recovery and reconstruction, according to the OECD. The framework highlights the key role played by Finance Ministers in working with other government bodies to deliver effective disaster risk management strategies.

Future work could include:• Developing a further understanding of budgeting for disasters, e.g. identifying, pricing and budgeting of contingent liabilities;

• Considering mechanisms to enable sustained prevention and mitigation investments (e.g., mitigation funds), complementing the focus of the framework on the financial management of disaster losses;

• Examining the potential impacts of disasters on financial infrastructure and systems, focusing on their sustainability and business continuity; and

• Developing guidance and case studies for developing countries operating in extremely resource-scarce environments where people may be highly vulnerable to disasters and lack access to resources to mitigate impacts. More information on the framework is available at